How Liti Capital’s Dividend Payout Minimum is 30% Year Over Year — And What That Means for You
At Liti Capital, we’re disrupting the litigation finance market by merging it with blockchain. Not only does this expand the scope of potential for the industry itself, but it expands the scope of potential returns for our investors engaging in it. Let’s discuss how.
A traditional share in most publicly traded companies will give investors a steady dividend of up to 5% each year. Not too shabby. Though at Liti Capital, our LITI holders receive a minimum return on investment (ROI) of 30% year over year (YoY). This is a huge leap if you ask us.
So how are we able to do this? The predominant reason we can offer dividends of this degree to our LITI holders is that we’re approaching the litigation finance market in a completely new way, unlocking the doors to a sector of private equity previously unavailable to the everyday investor. We like to think of it as the 1%s best-kept secret — that they never felt particularly rushed to share.
Before our project, which makes it possible to participate in the industry through a minimal investment, anyone interested in getting involved in litigation finance had to comply with financially steep barriers to entry. Not only did you have to be an accredited investor, but you also had to make at least $200,000 a year and have a net worth above $1 million.
Unfortunately, these requirements still affect our friends in the United States, though they’re able to engage with the market through our ERC20 token, wLITI, whose value is fixed to our first-of-its-kind equity token, LITI.
Limitations like these that keep the rich rich and other socioeconomic classes from possibilities to get rich aren’t new. Take Google, for example. They offer both an accessible public share and an elite-exclusive private equity share. The latter is said to pay its investors 40–50% on their original investment YoY. We have a hunch that the ROI for the public offering looks a little different.
We want to give retail investors opportunities to be involved in the outperforming alternative asset class that we operate in, because it has a lot to offer anyone and everyone. According to Steven Friel’s The Law and Business of Litigation Finance, litigation funders see an average of a 50%-100% return on their initial investments at the portfolio level and typically pocket three to five times their original capital.
By utilizing blockchain technology, we can put forward shares in our company through our equity token, $LITI. $LITI is only one of four approved equity tokens by the Swiss government. It functions exactly like a stock, just on the blockchain. $LITI holders — beyond dividends — are granted voting rights, shareholder protection through Swiss law, and for the first time in its history, liquidity in the litigation finance industry. While traditionally investing in litigation finance has meant locking up your capital for months, if not years at a time, our tokens can be sold at any point in time.
By crowdfunding on the blockchain through investors of all levels, we can raise the funding we need to purchase portions of legal cases that respect the environment, human rights and encourage court equity. We secure the best experts and lawyers for our claimants, offer them crucial guidance, and walk them through the entire legal process in exchange for a portion of the settlement or recovery. When we cherry-pick cases to represent, our agreements are non-recourse — meaning we only receive compensation if we win, and that compensation is usually around 20–30% of the case settlement or reward.
Let’s talk hypothetical numbers to highlight how investing in us could benefit you. Our current cases span from a maximum case claim of $100 million to over $1 billion. If one of our $100 million maximum case claims is awarded the full amount, for example, our plaintiff will walk away with $70 million, and we will walk away with the remaining $30 million. We’ll take 20% of that $30 million — in this case, $6 million — and put 5% or more, let’s call it $300,000 in this case, into our Scambusters Initiative, which we go towards cleaning up the crypto market and financing crypto-fraud cases that have affected our community members. The remaining 95% of our $6 million will be used to invest in more cases and support company activities.
The rest of the 70%, or $24 million, will be distributed among our LITI holders. While we still need to purchase more cases and receive the accompanying rewards or settlements before we can put this system into effect, investors who invest with us early will reap the benefits of not having to split these dividends at capacity.
It is only possible for 670,000 LITI tokens to be issued, and currently, just 270,000 exist. If 270,000 are purchased, our $24 million dividend distribution would equate to $88.89/share. And this is only considering one case.
As we ground and establish ourselves further as a company, we expect to purchase more substantial cases, resulting in more settlements and awards to maintain or approve on our 30% ROI YoY for our investors. On top of this, we anticipate for the LITI token itself to grow in value. It’s our vision to offer LITI and wLITI holders a fantastic means of passive income that promotes justice, is countercyclical to the economy, and is a secure option on the blockchain, designed for the long term.
Learn more about LITI and wLITI and how to purchase them here.
The information provided is not intended to provide a sufficient basis on which to make an investment decision. It is intended only to provide observations and views of certain personnel. The information provided, including hypothetical situations, strategies, methodologies and opinions, is expressed as of the date hereof and is subject to change. Alternative modeling techniques or assumptions might produce significantly different results and prove to be more appropriate.